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Apple overhauls its App Store pricing structure globally

Apple announced on December 6 that it has overhauled the pricing structure for its App Store, providing more flexibility to app developers across the world including India, even as the iPhone maker faces scrutiny over its app policies globally.

This move comes more than a year after the tech giant had announced plans to expand the price points developers can offer for subscriptions, in-app purchases, and paid apps, among other changes as part of its settlement with US app developers in a class action lawsuit in August 2021.

The company announced that it will provide developers access to 600 new price points, with an additional 100 higher price points available “upon request” bringing the total number of available price points on the App Store to 900, besides offering them new pricing tools that will make it easier to set prices per App Store country or region, and manage foreign exchange rate changes among others.

Prior to this, App Store offered 94 price points to non-subscription based apps and in-app purchases in India and other emerging markets, while 87 price points were available in the majority of the developed markets. Subscription-based apps had access to about 200 price points on the App Store.

These new pricing changes will be available for apps offering auto-renewable subscriptions starting December 6, 2022 and for all other apps and in-app purchases in mid-2023 (Spring 2023).

Under the new system, Apple will allow developers to set prices for their apps, in-app purchases or subscriptions as low as Rs 9 and going up to Rs 10,00,000. The new price points increase incrementally across price ranges. For instance, apps in the Rs 9-Rs 499 range can increase at Rs 5 increments, while apps in the Rs 500-Rs 1,499 range can increase at increments of Rs 10.

Developers will also be able to use rounded pricing to set the prices of their apps. This essentially means that one can set prices that end in formats such as Rs ‘x’ 0 (like Rs 10) or Rs ‘x’,900 (like Rs 9,900) instead of the current pricing structure that end only with Rs ‘x’ 9 (like Rs 99). These are particularly useful for managing bundles and annual plans, the company said.

Apart from the updated pricing policies, Apple stated that developers of subscription apps will be able to manage currency and taxes across storefronts in a much easier manner.

Starting today, they can choose a preferred storefront as the basis for automatically generating prices across the App Store’s other 174 storefronts and 44 currencies.

For instance, a Japanese game developer who gets most of their business from Japanese customers can set their price for the Japan storefront, and have their prices outside of the country automatically update as foreign exchange and tax rates change.

Developers will however still have the option to manually set the prices for each storefront as well as define the availability of in-app purchases for each of them. This capability will be extended to all other apps in mid-2023 (Spring 2023).

Also in 2023, developers with paid apps and in-app purchases will be able to set local territory pricing that will not be impacted by Apple’s automatic price adjustments made due to changes in taxes and foreign exchange rates.

The tech giant noted that it periodically updates prices in certain regions based on changes in taxes and foreign exchange rates. For instance, Apple had raised App Store prices in India in October 2020, by passing on the government’s 2 percent equalization levy along with 18 percent goods and services tax (GST) to Indian consumers.

This move will help developers to keep prices constant in the currency of their choice.

Apple, like its rival Google, is facing growing antitrust scrutiny over its app store policies in several countries, including the United States, the United Kingdom, and South Korea.

India’s competition regulator Competition Commission of India (CCI) had opened an investigation against Apple’s business practices in the country in December last year, saying it was of the prima facie view that the tech giant has violated some of the provisions of the Competition Act. Moneycontrol

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